Singapore’s economy is expected to increase by a mere six percent in the first quarter, due to the political turmoil in the Middle East and the Japan disaster.
According to Chua Hak Bin, an economist from Bank of America Merrill Lynch, global crises, such as the trouble in numerous Arab nations, increasing oil prices and inflation worries, are bound to impact Singapore’s economic growth.
He has reduced his Q1 economic prediction by two percent from the original eight percent he forecasted during the start of 2011.
The slow manufacturing figures in February and lack of activity in the construction sector also contributed to the economy’s sluggish performance.
In February, factory output crawled to 4.8 percent year-on-year, the lowest record in 15 months.
“Exports have also slowed, compared to last year’s double digit figures, (which means) things are slowing down,” said Mr. Chua.
Despite the decrease in growth predictions, the Monetary Authority of Singapore (MAS) is expected to allow the further rise of the Singapore dollar, when it performs its semi-annual review of monetary policy later in April.
According to DBS Bank, it expects the central bank to favour appreciation to ward off the risk of a high inflation rate.